Australia sues Google over sponsored links

An Australian regulator has filed a lawsuit against Google claiming that the …

Google has come under fire from Australian regulators who accused the company of "misleading and deceptive conduct." As in other parts of the world, the issue here concerns Google's close placement of sponsored and "organic" search results—in this case, results for Newcastle car dealers.

The Australian Competition and Consumer Commission has filed a federal case against Google, arguing that local car dealers Kloster Ford and Charlestown Toyota were harmed by Google after their names appeared in a sponsored link to a third dealer, Trading Post. This may sound like the sort of copyright squabble which has affected every major search engine (remember Utah's attempt to ban the practice on copyright grounds?), but the Australian case is different; the ACCC is bringing the case as a trade practices problem, not copyright infringement.

The regulator argues that Google has failed to "adequately distinguish sponsored links from 'organic' search results," and it also wants advertisers to stop sponsoring links that could suggest "an association, sponsorship, or affiliation with another business where one does not exist." In addition, the ACCC wants Google to stop publishing such ads, and they want the distinction between ads and search results made clearer.

Such a move could put a damper on Google's lucrative advertising sales, and a loss in Australia might cause other government watchdogs to take a closer look at Google's behavior in their countries as well. With nearly all of its revenue coming from ad sales, Google will no doubt fight the case tooth and nail. The company will get its first day in court on August 21.